Opinion

Fiscal treaty - taking the EU in the wrong direction

'Under the ESM treaty Ireland is obligated to make capital contributions of up to €11,145,400,000 which is the equivalent to approximately one third of the total Irish tax revenue for 2011' (Photo: Wayne Lam (Ramius))

As an Irish legislator and citizen I keep asking myself, would it not be absurd if Irish voters were to vote in the 31 May Fiscal Compact Referendum in favour of imposing austerity rules on ourselves in order to get future access to a proposed permanent Eurozone loan fund when the separate but “complementary” treaty establishing that fund is arguably illegal under EU law, unconstitutional in Ireland and has not yet come into force and indeed may never do so.

On 9 March I wrote to the Taoiseach, (The Irish Head of Government), the Minister for Finance and the Minister for Foreign Affairs detailing some of these very serious concerns. I have received no reply to this correspondence beyond the usual standard acknowledgement of receipt of the communication. I have now been left with no other option but to initiate legal proceedings challenging the Government on fundamental aspects of the both the European Stability Mechanism (ESM) and the Stability, Coordination and Governance in the Economic and Monetary Union (Fiscal Compact) Treaties.

I believe that both treaties raise serious legal difficulties both at the level of EU treaty law and Irish Constitutional law. My primary democratic concern as both a citizen and as an elected public representative is the integrity of the Irish Constitution and the EU treaties which now form such an important part of our constitutional framework. I believe that the matters that I seek the clarification and assistance of the Court on are of crucial importance not only for the citizens of this country but for the future of the EU.

My contention is that the particular Stability Mechanism being set up under the ESM Treaty is in breach of Article 29.4.4 of the Constitution of Ireland under which “Ireland affirms its commitment to the European Union within which the member states of that Union work together to promote peace, shared values and the well being of their peoples”. The proposed stability mechanism seems on the face of it to permit Member States to work not in solidarity and togetherness, but rather towards separation and exclusiveness.

This is because it allows only some Member States - and indeed only some members of the Eurozone rather than all of them - to participate in an arrangement which will clearly have implications for all.

I am asking the Court to examine the legality of the amendment of Article 136 of the Treaty on the Functioning of the European Union (TFEU) before any further action is taken by Government to approve that amendment. That amendment permits the establishment of a “stability mechanism” that would be able to grant financial assistance “subject to strict conditionality”. That amendment is being adopted under the so called “simplified revision procedure” which I believe is legally wrong. My argument is that the changes being proposed are so fundamental they should go through the ordinary revision procedure to ensure proper democratic scrutiny. They also require the approval of the Irish people in a referendum.

I am also asking the Court to consider whether the ESM treaty is in breach of existing EU treaty principles which have been approved by the Irish people in previous referendums and which are now therefore part of our law.

In addition I am asking the Court to decide whether the State can ratify the Treaty Establishing the European Stability Mechanism without first having the approval of the people in a referendum.

The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union signed on 2 March 2012 is intertwined with the ESM Treaty. They each depend on the other. Therefore if I am right in my belief that the ESM Treaty is unlawful then there is in my opinion a serious question over the validity of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union.

And the implications for Ireland are vast, given its current economic situation. Under the ESM treaty Ireland is obligated to make capital contributions of up to €11,145,400,000 in various forms of capital to the new permanent €500 billion bailout fund that is to be set up. In Ireland’s case, this is the equivalent to approximately one third of Government Tax Revenue for 2011.

I believe that my application to the Irish courts is just one more manifestation of a growing concern within the EU about developments towards a political union for the Eurozone along the lines of what President Sarkozy has termed “A Federation for the Eurozone and a Confederation for the EU as a whole” It is not a direction that I want the EU to take and I am sure that I am not alone.

The writer is an independent member of the Irish parliament, the Dail, for Donegal South West